UNIVERSITY OF CENTRAL PUNJAB

Assignment no 1:

 Assignment Submitted to :
Sir Shahzeb Khalid.
 Subject :
Information to Financial Accounting:
 Company:

DG CEMENT COMPANY. by Unknown Author is licensed under

Company introduction:
 D.G. Khan Cement Company Limited, (DGKCC) is amongst largest
the cement manufacturers of Pakistan with a production capacity of 22,400 tons
per day (6.72 million tons/annum). DGKCC has four cement plants, two plants
located at Dera Ghazi Khan, one at Khairpur Distt.

A: Accounting information is very important. List down the users of

accounting information (atleast 7 users) who will use your company
accounting information.
Ans:
 Accounting plays a vital role in running a business because it helps you track
income and expenditures, ensure statutory compliance, and provide investors,
management, and government with quantitative financial information which can
be used in making business decisions.

USERS OF ACCOUNTING INFORMATION:

1. Investors
2. Owners
3. Suppliers
4. Customers
5. Management
6. Creditors
7. General Public.

B: Explain how your company’s accounting information will be helpful

for those users (who were mentioned by you in Part A). What will they
actually look in your company, which will be of their interest?
Ans:
The fundamental qualities of accounting information are relevance and reliability,
also known as representational faithfulness. If accounting data is to be relevant
and useful to decision makers if must be timely. ... In general, the accounts should
truthfully represent the business's financial picture.
1. Investors:
In corporate from of business,the ownership is often separated from
the management .Normally investors provide capital and management runs the
business.
The accounting information is used by both actual and potential
investors.Actual investors use this information to know how their funds are
used by management and what is the expected performance of business in
future in terms of profitability and growth.Potential investors use accounting
information to decide whether or not a particular corporation is suitable for their
investment needs.
2. Owners:
Owners invest capital to start and run business with the primary objective to
open earn profit.They need accurate financial information to know what they
have earned or lost during a particular period of time.
3. Suppliers:
 Suppliers are business individuals or organizations that normally sell
merchandise or raw materials to other businesses on credit.They use
accounting information to have an idea about the future credit worthness of
the business and to decide whether or not to continue providing goods on
credit.
4. Customers:
Acoounting information provides important information to customers about
current position of a business organization and to make a judgment about its
future.Customers are divided into three groups: Manufactures or Producers at
various stages of production,wholesalers and retailers and end user or final
consumers.
5. Management:
Managent uses accounting information for evaluating and analyzing
arganization’s financial performance and position to take important
decisions and appropriate actions to improve the business performance in
terms of profitability,financial position and cash flows.
6. Creditors:
Lenders are individuals or financial isititutions thst normally lend money to
businesses and earn interest income on it.They need accounting information to
access the financial performance and position and to have a reasonable
assurance that the business to whom they are going to lend money would be
also to retrun the principle amount as well as pay interest there on.
7. General Public:
General public may also be interested in accounting information of a company.
These could include journalists, analysts, academics, activists and individuals
with an interest in economic developments.

 Scenario is changed: (Your selected company is in loss now)

C: Assume that company suddenly started facing loss during COVID-
19. It was the because of poor internal control system for viruses like
COVID-19. Now your management accountant is asking for assistance
in making new internal control to counter challenges like COVID-19.
Recall five components of internal control studied in previous lectures
and implement new internal controls for your company. (Use your
general knowledge, how the companies should tackle viruses like
COVID-19. Build a strong internal control system for your company)
Ans:
When the company started facing loss due to Covid-19 circumstances
here are few components of internal control by the management of the
company which will help the company to bear the loss and make the
company back to its Market.
 There are five components are as follows:

1) Control Environment
2) Risk Assessment
3) Control Activities
4) Infirmation and Communications
5) Monitoring.

1. Control Environment:
Control Environment this is the attitude of management and their
employees regarding the need for internal controls.If the controls are
taken seriously ,this greatly enhances the robustness of the system of
internal control.
o Shift the business Online
o Effective Allocation of Resources
o Online Business Transaction
In case of COVID-19 The DG Cement Company,They did not shifted their
business online due to which they struggle in this pandemic situation.

2. Risk Assessment:

This is the process of reviewing the business to see where the most
critical risk lie and then designing control to address those risk This
assessment must be conducted on a regular basis to take account of any
new risk introduced by the business.

o Identify what work or activity maight cause transmission of the virus

o Specific age group which the virus effect most.
As an employer you must protect people from harm this include taking reasonable
steps to protect your workers and other from Covid-19.

3. Control Activities:
This is the use of Accounting systems,Information Technology and other resources
to ensure that appropriate controls are put in place and operating
properly.Controlling the activities in an organization must be the first priority of
any organization to protect their employees and business from external
circumstance.
o Follow the SOPs of the company
o Maintain at least 6 feet distance between employees and their working areas.
4. Informantion and Communications:
Information about control should be communicated with the management
in a timely maaners, so that shortfalls can be addressed prompty. The
amount of information communicated should be appropriate to the needs
of the recipient.When virus start effecting the people and employees we
must shift them online business.

5. Monitoring:
This is the set of process used by the management to examine and assess
whether its internal controls or functions properly.Ideally, management
should be able to support the control failiures and make adjusments to
improve the control environment.After making all steps mentioned above it
should be closely monitored to know that it is effectiveness or not.At last we
need to keep monitor the business and keeping complete eye check on our
blance sheets whether the business is maling profit and loss to make further
decisions about the expansion or contraction of business.

Complete.

 ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my
teacher(Sir Shahzeb Khalid.) who gave me the golden
opportunity to do this wonderful assignment.